APR to APY Calculator

APR vs. APY — what's the difference?

APR (annual percentage rate) is the simple nominal rate, ignoring compounding. APY (annual percentage yield, or effective annual rate) accounts for compounding within the year — the interest that itself earns interest. Because of compounding, the APY is always a little higher than the APR, and this tool converts between them for any compounding frequency.

The formula

APY = (1 + APR ÷ n)ⁿ − 1, where n is the number of compounding periods per year. A 6% APR compounded monthly gives an APY of about 6.17%.

Why it matters

• Savings accounts advertise APY — the true yearly return you earn.
• Loans and credit cards advertise APR — but you effectively pay closer to the APY because of compounding.
• To compare two products fairly, convert both to the same measure.

FAQ

Does more frequent compounding help a lot?

Only a little. Going from monthly to daily compounding on a 6% APR raises the APY by a couple of hundredths of a percent. The rate itself matters far more than the compounding frequency.

Is this APR/APY calculator free to use?

Yes, it's completely free with no sign-up, account, or limits on conversions. Convert as many rates as you like.

Does my data stay private?

Yes. Every calculation runs entirely in your browser, so the rates and figures you enter are never sent to a server or stored anywhere.

Can I convert APY back into APR?

Yes. The relationship is reversible: given an APY and a compounding frequency, the equivalent APR is n × ((1 + APY)^(1÷n) − 1). The tool handles the conversion in both directions so you can compare any two products on the same basis.

Why is the APY on my loan higher than the advertised APR?

Lenders quote APR, the nominal rate before compounding, but interest that accrues actually compounds, so the effective cost is the APY. On a credit card compounded daily the gap can be noticeable, which is why converting to APY shows what you really pay.

Does APR include fees like an official lending APR?

No. This tool converts between nominal and effective interest rates only. A regulatory "APR" on a mortgage or loan also folds in origination fees and points, which this calculator does not model.